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HomeMy WebLinkAboutCC 2012-07-27 MinutesMINUTES OF THE BUDGET WORK SESSION OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD AT THE NORTH RICHLAND HILLS LIBRARY COMMUNITY ROOM, 9015 GRAND AVENUE, NORTH RICHLAND HILLS, TEXAS — JULY 27, 2012 Present: City Council: Oscar Trevino Tito Rodriguez Rita Wright Oujesky Tim Barth David Whitson Scott Turnage Tim Welch Staff: Mark Hindman Karen Bostic Jared Miller Mike Curtis Vickie Loftice Jimmy Perdue Patricia Hutson Larry Koonce Mark Mills Mary Peters Patrick Hillis Craig Hulse Jennipher Castellanos Kristin Weegar Mike Hamlin Andy Kancel Orsheka Moore Stacey Udoni Mayor Council Member Council Member Council Member Council Member Council Member Council Member City Manager Assistant City Manager Assistant City Manager Managing Director Managing Director Director of Public Safety City Secretary Director of Finance Director of Budget Public Information Officer Director of Human Resources Economic Development Director Budget Analyst Assistant to City Manager Assistant Police Chief Assistant Police Chief Financial Analyst Public Works Management Assistant Absent: Tom Lombard Council Member / Mayor Pro Tern CALL TO ORDER Mayor Trevino called the Budget Work Session to order July 27, 2012 at 8:35 a.m. Mayor Trevino announced that the Crime Control and Prevention District Board would meet in conjunction with the Council Budget Work Session. Mayor Trevino briefly commented on the budget expressing his support of the budget. Budget Work Session Minutes July 27, 2012 Page 2 Throughout the work session Staff presented a PowerPoint presentation that provided an overview of the Revised 2011/2012 and Proposed 2012/2013 Operating and Capital Project Budgets, initiatives to be continued from previous years, trends and major financial and economic issues affecting the budget, revenues and expenditures and enhancements to services. The City Manager began the presentation by giving an overview of the budget. Mr. Hindman discussed four influential events of 2012 and their effect on the budget — the opening of the NRH Centre, consolidation of detention and dispatch services with Haltom City, Richland Hills and Watauga, voter approval of the municipal facility bond program, and construction of the North Tarrant Express project. Mr. Hindman gave an overview of the General Fund discussing economic factors affecting the budget - sales tax revenue, property value growth, consumer price index growth and unemployment reduction. Mr. Hindman reported that while sales tax is impacted by the construction of the North Tarrant Express, sales tax revenue has improved. For Fiscal Year 2011/2012 sales tax revenue is expected to slightly surpass the adopted budget and a slight increase is projected for Fiscal Year 2012/2013. There has also been an increase in new development and property values have seen a small increase. Unemployment is one percent lower than 2011. Mr. Hindman discussed the following major budgetary issues considered in the 2012/2013 budget: • Consolidation of Detention and Dispatch Services • Position Reinstatements • Health Insurance • Ambulance bills /bad debt • Cable Television(PEG) Reserve • Fleet Contribution Council was advised of some unfunded programs and projects that had been left for Council to consider funding. There was a discussion of the following unfunded programs: Item /Project General Fund Compensation Adjustments $302,905 Park Maintenance Worker Position $32,579 Sidewalk Construction Program $50,000 Sidewalk Rehabilitation and Replacement $50,000 Program Additional Street Maintenance Funding $200,000 School Resource Officer (SRO) Position $60,187 Later in the meeting, Council provided direction to Staff on the funding of the above projects. Council was given a brief overview of the Utility, Golf, Park & Recreation Facilities Development and Crime Control and Prevention District funds. Increases in the Utility Fund are attributed to the second year of the three -year utility rate increase. Water Budget Work Session Minutes July 27, 2012 Page 3 usage is up 4.2% or $1.54 per month and sewer is up 8.0% or $1.86 per month. The Golf Fund has been impacted by the construction of the North Tarrant Express and revenues are expected to be lower in FY 2012/2013. The NRH Centre is performing well and the Park & Recreation Facilities Development Fund is meeting its budgetary goals with revenue from the Centre exceeding planned expenditures. As a result of the public safety consolidation with Richland Hills, Watauga and Haltom City, revenues and expenditures related to detention or communication have been shifted from the Crime Control District Fund to the General Fund. Most of the increase in expenditures is offset by reimbursements from the three cities. The City is now funding the One Safe Place Family Justice Center. NRH20 experienced its best year for attendance in 2011 and Aquatics Fund revenue for 2012 is anticipated to be better than 2011. Council was also given an overview of the Drainage, Promotional and Donations funds. Mr. Hindman gave a synopsis of the 2012 -2013 CIP Program. Total proposed for Fiscal Year 2012 -2013 is $21,926,520. Project 2012/2013 Municipal Complex $10 million Smithfield Road Improvements (Davis to Mid - Cities) $710,000 NRH Animal Adoption & Rescue Center $1.3 Million Sanitary Sewer System Rehab. of Main Lines (Phase II) $1.5 Million Rescue Pumper Replacement $660,000 Maintenance at Fire Stations 1, 2, 3 and 4 $176,100 Mr. Craig Hulse, Director of Economic Development presented the economic outlook discussing national and local trends. Mr. Hulse discussed the consumer confidence index, consumer price index, consumer credit, and prime mortgage lending. Council was updated on local business and employment growth trends, taxable sales comparisons, and commercial and new residential permits. Mr. Hulse updated Council on the North Tarrant Express project within the city and advised of areas in the city being considered by potential businesses. Mr. Patrick Hillis, Director of Human Resources, presented the proposed compensation and benefits program for the 2012/2013 budget. Council was advised that both public and private sector employers have begun to see an increase in salary growth and it is anticipated that there will be continued salary growth in the future. Mr. Hillis discussed conducting the salary survey, the methodology for the survey and the results of the most recent survey. Mr. Hillis discussed area market expectations for Fiscal Year 2012/2013 and three compensation options that could be considered — merit increase, pay range adjustment or lump sum increases. Survey results indicate that must of the survey cities did not make pay range adjustments this fiscal year. It is anticipated that a number of cities will be making adjustments next fiscal year. At the request of Council, Mr. Hillis discussed the pros and cons of each of the compensation options. For Fiscal Year 2011/2012 the City's health insurance costs have been under budget. The Fiscal Year 2012/2013 budget includes a 5% increase for health /medical and 5% increase to Budget Work Session Minutes July 27, 2012 Page 4 employee /retiree monthly medical premiums with no plan design changes. Council was given a brief update on the Affordable Care Act, its impact to the City's health plan and mandates that the City must comply with in 2013. Council was provided with updated Fund Summary Schedules and Ms. Bostic gave a brief overview of changes made to the schedules. Mr. Mark Mills, Budget Director, provided an overview of the revised to adopted 2011/2012 General Fund Budget. Mr. Mills compared the adopted to the revised revenues and expenditures and appropriations of fund balance. The revised budget projects total revenues to be $39,892,202, an increase of $2,119,593 over the adopted budget. Expenditures are projected at $39,858,558, an increase of $2,143,581 over the adopted budget. Mr. Mills provided an overview of the net taxable value history. The net property taxable value for tax year 2012 is $3,732,731,760. This was compared to the taxable value in 2008 of $3,759,485,131 before the 2009 decline of values began. For Fiscal Year 2012/2013 General Fund revenues are projected at $40.7 million, an increase from FY 2011/2012 adopted revenues by $2,989,031. Revenues are projected to increase from property taxes, sales tax and franchise fees. Expenditures are forecast to be at $40,361,584, an increase of $2.6 million over adopted FY 2011/2012 budget. The majority of the increase in expenditures is from the first full year of consolidated detention and dispatch services. Mr. Mills discussed some of the significant non - departmental and departmental expenditures in the proposed budget. Items highlighted included: All Departments • FY12 Merit/ Market Partial Year Impact • Increase in Internal Services Allocations • Health & Workers Comp Allocation Adjustments Planning & Inspections • Reinstatement of Inspector and Clerk Positions Economic Development • Redistribution of Economic Development Expenditures from Promotional Fund to General Fund Library • Budget for Printed Materials Remains Level to FY12 • Increase in Budget for Electronic Materials Public Works • GPS Time Synchronization Devices • Traffic Controllers • Preventive Street Maintenance Program at $800,000 Parks & Recreation • Cultural Arts Program Coordinator relocated to the Promotional Fund • Reallocation of Cultural Arts Events to the Promotional Fund Police Department • SRO Position Unfunded • Consolidation Budget Work Session Minutes July 27, 2012 Page 5 • Detention, Communications, and Administration moved from CCD Fund to General Fund • Technical Services (Records) moved from General Fund to CCD Fund Fire Department • Physio- Control LifePak15's • Physio - Control LifePak AED's Non- Departmental • Ambulance Bad Debt Reserves & Other • Sidewalk Maintenance Program Funded From Reserves • Transfer of Funds for Public Safety Analyst (Consolidation) • Reserve for PEG Fee Mr. Mills discussed the proposed tax rate for Fiscal Year 2012/2013. The proposed budget includes a tax rate increase of 4 cents bringing the tax rate to 61¢ per $100 valuation. The increase in the tax rate is attributable to the bond election. The full 4- cent increase will be used to pay for debt service associated with the general obligation debt for the Municipal Complex approved by the citizens in May. Mr. Mills gave an overview of the history of the tax rate distribution and explained the two components of the tax rate and compared it to FY 2011/2012: FY 12/13 Tax Rate Components: General Fund — M & O 57.6% $0.351075 Debt Service Fund & TIFS 42.4% $0.258925 Total Distribution of Tax Rate 100% $0.610000 FY 11/12 Tax Rate Components: General Fund — M & O 62.5% $0.356419 Debt Service Fund & TIFS 37.5% $0.213581 Total Distribution of Tax Rate 100% $0.570000 Council concurred with the proposed tax rate. Mayor Trevino recessed the work session at 12:03 p.m. and called the work session back to order at 1:02 p.m. All Council members and Staff were present as previously recorded. Mr. Mills referenced the Debt Service Fund and inquired if Council had any questions. In response to a request from Council for discussion on debt capacity, Mr. Hindman gave a brief overview of the financing sources and presented a chart of the projected debt service showing the long -range debt forecast. Council concurred with General Fund Budget as presented. Mr. Mills began a review of the Special Revenue Funds beginning with the Park and Recreation Facility Development Fund. Mr. Mills highlighted the Revised 2011/2012 Budget Work Session Minutes July 27, 2012 Page 6 Park Fund revenues and expenditures and the Preliminary 2012/2013 Park Fund revenues and expenditures. Revenues and expenditures in the 2011/2012 Revised Budget have been revised to $$7,851,449. For the Proposed 2012/2013 Budget, revenue is projected at $7,620,861 and expenditures are projected at $7,587,247. Sales tax revenues are projected to increase $96,040 between the Adopted 2011/2012 and Proposed 2012/2013 Budget. Mayor Trevino announced at 1:25 p.m. that he was recessing the Council Budget Work Session and calling the Crime Control and Prevention District Budget Work Session to order. After the District's Board of Directors discussed the proposed budget, Mayor Trevino adjourned the Crime District Work Session at 1:33 p.m. and called the Council's Budget Work Session back to order at 1:33 p.m. Mr. Mills reviewed and discussed with Council the remaining budgets for the Special Revenue Funds consisting of the Promotional Fund, Donations Fund, Special Investigation Fund, Drainage Utility Fund, Gas Development Fund, and Traffic Safety Fund. Council was advised that there were no significant changes to these funds. Council concurred with the budgets for the Special Revenue Funds as presented. The Revised and Proposed Budgets for the Enterprise Funds (Utility Fund, Aquatic Park Fund and Golf Fund) were presented to Council. Mr. Mills highlighted the Revised 2011/2012 Utility Fund revenues and expenditures. Total revised revenues and Appropriation from Fund Balance are $27,714,111, an increase of $461,647 from adopted. Total revised expenditures are $27,714,111, an increase of $686,363 from adopted. Water sales and charges for FY 2012/2013 are projected at $18,738,067, sewer sales and charges are projected at $9,277,145 and miscellaneous revenue is projected at $842,403 for total revenue of $28,857,615. Total expenditures are projected at $28,806,678, an increase of $1.78 million more than the FY 2011/2012 adopted budget. Council concurred with the Utility Fund budget. Mr. Mills highlighted the Revised 2011/2012 Aquatic Park Fund. Revenues and expenditures are expected to increase by $100,461 in the FY 2011/2012 Revised Budget. The largest portion of the increase in revenues is from admissions. The increase in expenditures is attributed to the operations of NRH2O. An additional $51,000 is being placed in reserves for infrastructure and major repairs. The Proposed 2012/2013 Budget projects revenues of $4,734,297 and expenditures of $4,726,308. The proposed budget projects attendance at 265,000 and increases in revenue from ticket and merchandise sales. Council concurred with the Aquatic Park Fund. Mr. Mills highlighted the budget for the Golf Course Fund discussing the history of rounds of golf played, the 2011/2012 Revised Golf Course Revenues and Expenditures and Proposed 2012/2013 Revenues and Expenditures. Revised revenues for FY 2011/2012 are projected downward from $2,609,774 to $2,479,779 and revised expenditures are projected at $2,455,171. The projected decrease in revenue is attributed to the construction along the North Tarrant Express and the revenue from green fees declining. As a result, expenditures for the Pro Shop and the cost of capital Budget Work Session Minutes July 27, 2012 Page 7 have been reduced in order to balance the budget The Proposed 2012/2013 Budget projects a slight decrease in rounds of golf and net revenues of $2,201,035, a decrease of $70,983 from the adopted budget. It is anticipated that green fees and revenue from the Pro Shop will continue to be slightly lower from the construction along the North Tarrant Express. The proposed budget includes $122,500 for replacement of capital equipment. The Golf Course will continue to contribute $147,000 to the General Fund for the repayment of loans in accordance with the repayment schedule. Council concurred with the Golf Course Fund. Mr. Mills presented overviews of the Internal Service Funds consisting of the Facility /Construction Management Fund, Fleet Services Fund, Information Services Fund and Insurance Fund. Mr. Mills highlighted the major expenditures in the proposed budget for the Facility /Construction Management fund. A major increase is due to a full year of electric expenses for the NRH Centre. The other large increase is the transfer to the Capital Projects budget to fund capital projects. The proposed Fleet Services budget consists of expenditures in the amount of $3,280,927, an increase of $125,520 over Fiscal Year 2011/2012 adopted. The Fleet Services Vehicle Replacement Plan was highlighted and briefly discussed. Expenditures in the Information Services Fund are proposed at $2,885,112, an increase of $199,773 over FY 2011/2012 adopted. Expenditures proposed for FY 2012/2013 include the replacement of the Library Server, computer replacements according to the replacement plan and the addition of the Laser Fiche Records Management Module. The proposed budget for the Self Insurance Fund is $10,053,785, an increase of $536,008 for all insurance purposes. Council concurred with the Internal Service Funds as presented, with the budgets for all Operating Funds and with the four cent tax rate increase that will be applied to debt service. Council discussed the unfunded projects discussed earlier in the meeting. Item /Proiect General Fund Compensation Adjustments Park Maintenance Worker Position Sidewalk Construction Program Sidewalk Rehabilitation and Replacement Program Additional Street Maintenance Funding School Resource Officer (SRO) Position $302,905 $32,579 $50,000 $50,000 $200,000 $60,187 Mr. Hindman advised there was $400,000 in available funding to fund any unfunded projects the Council considered as high priority. Council discussed the employees being one of the City's most important assets and the importance of maintaining the compensation and benefits program. Council also discussed providing $100,000 Budget Work Session Minutes July 27, 2012 Page 8 additional funding for the Preventative Street Maintenance Program instead of the $200,000. Mr. Hindman advised there was some fund balance available in the Street Preventative Maintenance Program to fund the Street Maintenance Program and some funds were available in the Pay As You Go Reserves to fund the Sidewalk Programs. Council supported building reserves to be able to target streets impacted by the 820 construction after the completion of the project. Council also discussed reducing the Sidewalk Construction and Sidewalk Rehabilitation programs to $25,000 each. After discussion, the consensus of Council was to fund the compensation adjustments, fund the park maintenance worker position, additional street maintenance funding at $100,000 and more money to be placed in reserves, and $50,000 for the sidewalk programs. Council began a review and discussion of the Capital Improvements Program Budget. Mr. Mike Curtis, Managing Director, presented the Capital Improvements Program for streets, drainage and utility. The total proposed CIP Budget for 2012/2013 is $21,926,520 with over 7% of the total budget going towards streets and utilities. There are no new drainage projects proposed for Fiscal Year 2012/2013. The total proposed CIP budget for Public Works is approximately $7.1 million with $3.8 million budgeted for streets and $3.3 million budgeted for utilities. For Fiscal Year 2012/2013 there are sixteen continuing street projects, four new street projects, twelve continuing drainage projects, nine continuing utility projects and nine new utility projects. An overview of the significant projects was presented. After discussion and questions from the Council, Council concurred with the Public Works Capital Improvements program. Ms. Vickie Loftice, Managing Director, presented the Park and Recreation Facilities Development Corporation Capital Projects Budget for Fiscal Year 2012/2013. The total proposed budget is approximately $1.2 million. Ms. Loftice highlighted the continuing projects and three new projects (park infrastructure maintenance, Richland Tennis Center asset management and TUCOR Irrigation System). Ms. Loftice presented the proposed 2012/2013 NRH20 Waterpark Budget. The proposed budget includes funding from reserves and pay as you go for five new projects at $452,000 (concrete revitalization, general facility improvement, long term development plan, repair of catering building roof repair and security and nighttime operation light replacement). The Council concurred with the Park and Recreation Capital Projects Budget and the Aquatic Park Budget. Council reviewed and discussed the Municipal Facility Capital Projects. Mr. Jared Miller, Assistant City Manager, highlighted three of the seven continuing projects — Loop 820 Expansion Preparation, Municipal Government Complex and NRH Animal Adoption & Rescue Center — New Facility. Four new facility projects were presented and discussed — Building envelope and roofing repairs at Fire Stations 2 & 4, and at the Iron Horse Golf Course cart barn, concrete floor finish resurface at Fire Station 1, general construction at the Library to improve parking lot drainage and modify the drive up book Budget Work Session Minutes July 27, 2012 Page 9 drop approach, and overhead door replacement at Fire Station 3. There were no questions from Council on the projects. Mr. Miller highlighted the Major Equipment Capital Projects budget. The budget includes three continuing projects (computer /phone replacement/upgrade for new Recreation Center, hardware replacement for IBM AS 400, and Teleworks replacement for online and VOIP platforms) and two new projects (dump truck replacement and rescue pumper replacement). There are no new Economic Development projects and no changes proposed to the continuing Economic Development projects. The Council concurred with the 2012/2013 Capital Projects Budget. Mr. Mills reviewed the budget calendar and dates for the upcoming public notices and public hearings. Mr. Mills advised the second tax rate public hearing was proposed for Thursday, August 30. Council concurred with the date for the second public hearing. There being no further business, Mayor Trevino 'ourned a ork session on July 27, 2012 at 3:30 p.m. Osc r T o = Mayor ATTEST: iinHufsif f Secretary %... f * ....��, .�